Simfer, which is owned by Rio Tinto and Chalco Iron Ore, with a minority stake held by the Guinean government, has concluded key agreements for the development of over 600km of new multi-use rail together with port facilities.
The deal provides the legal framework to develop infrastructure needed to export iron ore from the Simandou mining concessions, located in the southeast of the country.
Rio Tinto has hailed Simandou as "the world's largest known undeveloped supply of high-grade, low-impurity iron-ore". But the project has had a long road to development, in significant part due to the logistical challenges posed by operation.
"With these agreements we have reached an important milestone towards full sanction of the Simandou project, bringing together the complementary strengths and expertise of Rio Tinto and our partners, the government of Guinea and WCS, for the infrastructure that will unlock this world class resource," said Bold Baatar, Rio Tinto's executive lead for the project, who also heads Rio's copper business.
The infrastructure capacity and associated cost will be shared equally between Simfer, which is developing blocks 3 and 4 of the Simandou project, and a JV of Chinese companies, Winning Consortium Simandou (WCS), which is developing blocks 1 and 2.
The acceleration of the massive Simandou project will drive increased capex for Rio in 2024 and 2025.
The infrastructure deal now requires ratification by the Guinean government and is subject to a number of conditions, including the government approval of the final feasibility study for the project. Negotiations to finalise the investment agreements are ongoing.
